Grandparents Investing in Grandchildren

A recent Life&Health Advisor article explored the MetLife Mature Market Institute’s tip sheet, “Grandparents Investing in Grandchildren: Actions Speak Louder than Words,” produced with Generations United. The tip sheet, which was created in response to the MetLife study Grandparents Investing in Grandchildren: The MetLife Study on How Grandparents Share Their Time, Values, and Money, gives advice to grandparents in three specific areas: Sharing Values and Beliefs, Celebrating Family and Investing in Your Grandchildren’s Financial Security.

The tip sheet states that “according to a recent interview on National Public Radio, when it comes to discussing financial matters, grandchildren often feel a closer kinship to their grandparents than they do with their parents.” With more than 70 million grandparents living in the U.S. today – more than ever before – intergenerational support and influence has the potential to make a lasting impact on today’s youth. To help make sure your grandchildren are financially savvy, the tip sheet gives the follow advice:

Foster Early Savings Habits: You don’t need to wait until your grandchildren have their first job to encourage savings. Once a child has mastered counting, you can buy them a piggy bank to begin saving any gifts or allowances they may receive, or if your grandchild is already older, you can take them to open a savings account. Be sure to discuss your plans with your grandchild’s parents before opening anything with the child.

1. Encourage Smart Spending: Explain the difference between wants and needs, describing your own spending and savings habits and how they vary between these two types of desires. Help your grandchild establish a budget and discuss goals for saving for specific purchases.
2. Make Grand Investments: Once you have your own financial plan in place, consider what you want to do for your grandchildren. You may choose to invest in U.S. savings bonds, money market funds, 529 college savings plans, insurance, etc. 

Whether you live in the same house or on the other side of the country, you have the opportunity to invest in your grandchildren’s futures, both monetarily and through education and guidance. Contact a Certified Financial Planner today for more information on how you can invest in your grandchildren’s futures without compromising your retirement, or for assistance starting financial conversations with younger generations. 

FINANCIAL FACTS 

Union Employees – Private sector employers of union workers pay three and a half times as much money for retirement benefits (per hour worked by an employee) as compared to private sector employers of non-union workers (source: Department of Labor, BTN Research).  

Ongoing Bull – From its bear market low close on March 9, 2009, (43 months ago), the S&P 500 has gained 130 percent (total return) through the close of trading on Friday, Sept. 28, 2012 (source: BTN Research).  

Too Close For Comfort – U.S. public debt is 72.8 percent of the size of our economy as of the close of fiscal year 2012, i.e., Sept. 30, 2012 (source: Congressional Budget Office, BTN Research).